Consumer Education Initiatives in Financial and Health Literacy. Terms and Definitions

12/06/2010

Our focus in this study was on financial and health literacy initiatives aimed at low-income individuals. Financial literacy is the ability to make informed judgments and manage money effectively (U.S. Government Accounting Office [GAO], 2006). Health literacy is the ability to obtain, process, and understand basic health information to make appropriate health-related decisions (HHS, 2010). Consumers encounter complex information and may need to understand not only information about their health condition but also information about the risks and benefits of different treatments, how and when to take medications, and how to understand test results.

Literacy includes three types of literacy  prose, document, and quantitative  because adults use different kinds of printed materials in their daily lives. These types of literacy include:

  • Prose literacy:  The knowledge and skills needed to perform prose tasks, (i.e., to search, comprehend, and use continuous texts). Examples include editorials, news stories, brochures, and instructional materials.
  • Document literacy: The knowledge and skills needed to perform document tasks, (i.e., to search, comprehend, and use non-continuous texts in various formats). Examples include job applications, payroll forms, transportation schedules, maps, tables, and drug or food labels.
  • Quantitative literacy or numeracy: The knowledge and skills required to perform quantitative tasks, (i.e., to identify and perform computations, either alone or sequentially, using numbers embedded in printed materials). Examples include balancing a checkbook, figuring out a tip, completing an order form, or determining the total amount that an item or items cost.

(Kutner, Greenberg, Jin, & Paulsen, 2006)

These three types of literacies are all used in health and financial literacy, but not necessarily to the same degree. Due to the sheer volume and rapidly growing nature of health literature and resources, it is likely that health literacy may include more prose literacy and document literacy compared to quantitative literacy. Financial literacy, on the other hand, has many stable concepts, but is far more likely to involve more document literacy, and especially quantitative literacy compared to prose literacy. If the literacy is used without modifier in this report, (i.e. financial or health) it is always referring to this definition.

Additional technical terms that are likely to be unfamiliar to persons in either the health or financial fields will be defined in footnotes.

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